14 Manage Order Promising Rules

ATP Rules, Allocation Rules, and Sourcing Rules: How They Work Together

You create available-to-promise (ATP) rules
and allocation rules to define how the items on fulfillment lines
are promised by the order promising engine. ATP rules and allocation
rules enable you to govern the behavior of the order promising engine.
You can configure different types of rules and assign them in various
ways to items and organizations to enable you to get different behavior
for different items. You create sourcing rules, and assign the sourcing
rules to assignment sets, to define your supply sources and supply
chains used when order promising conducts a supply chain availability
search.

ATP Rules

Oracle Fusion Global Order Promising provides an order
promising engine with flexible promising process logic that you can
direct per your business requirements though your definition of ATP
rules. For example, constrained and high value items can be promised
using supply chain availability search, while low value items can
be promised by assuming infinite supply. The following are key points
regarding ATP rules:

ATP rules define order promising
behavior by enabling you to specify:

The promising mode to be used by
the order promising engine to determine how supply availability is
considered

The supply and demand source types
to be considered during promising

The usage of advanced promising features,
such as capable to promise and profitable to promise

ATP rules can be assigned flexibly
to items, item organization, organization, or categories.

By assigning different ATP rules
to different items, fulfillment lines for various items can be promised
in various ways.

Allocation Rules

Allocation rules enable you to specify portions of
supply by demand classes to ensure high service levels for specific
demand classes. For example, 80 percent of supplies can be allocated
to satisfy high priority demand classes. Allocation rules are applicable
only when promising results are being determined through a
supply chain availability search. If order promising is using a lead-time-based
ATP rule or an infinite-availability-based ATP rule to determine promising
results, allocation rules will not be considered.

If order promising is applying an ATP rule in supply
chain availability search mode, an allocation rule may be applied
if the following are true:

The fulfillment line being promised
has specified a demand class.

The demand class has been specified
in an allocation rule that is applicable to the item being promised.

The ATP rule being applied has been
defined to respect allocation constraints.

Sourcing Rules

When order promising is conducting a supply chain
availability search, sourcing rules and the assignment sets that the
sourcing rules are contained within provide the details of the supply
chain to search. You may have many different manufacturing and distribution
locations that can supply the same product. Sourcing rules determine
the acceptable fulfillment locations to be considered. The order promising
supply chain availability search results determine the best location,
based on the product and order request date, from the locations specified
in the sourcing rules.

Manage ATP Rules

ATP Rule Promising
Modes: Explained

The promising mode of an available-to-promise
(ATP) rule determines which set of attributes order promising logic
evaluates when determining ATP results. When you create an ATP rule,
the first thing that you must specify is which of the three promising
modes is applicable to the ATP rule.

These are the three promising modes:

Supply chain availability search

Lead time based

Infinite availability based

Infinite Availability Mode

You create ATP rules in infinite availability mode
most often for assigning to items that are not constrained in supply
and are of low value. Here are the key points of the infinite availability
based mode:

The item is promised on the requested
date irrespective of availability.

No availability search is performed.

Calendars are respected during promising.

The order promising engine does not
generate any pegging.

Transit time constraints are respected;
therefore, requests within transit lead times are promised after accounting
for the transit lead time.

No other attributes are associated with the infinite
availability mode of promising.

Lead Time Mode

You create ATP rules in lead time promising mode most
often for assigning to items that are always assembled or built on
demand. This mode is typically used for items that can be procured
or produced with a reliable lead time. Here are the key points of
the lead time based mode:

Orders are promised after a specified
lead time, as promise dates are always offset from the requested date
by the specified lead time.

No supply availability search is
performed.

Lead time can be specified in multiple
ways.

The order promising engine does not
generate any pegging.

Calendars and transit time constraints
are respected.

When you create ATP rules in lead time promising mode,
you select one of the following four lead timesto be used:

Total lead time

Cumulative manufacturing
lead time

Cumulative total lead time

User-defined lead time

Supply Chain Availability Search

You create ATP rules in supply chain availability
search mode for assigning to items for which you want promising results
determined by a search for available product supply. The supply chain
availability search promising mode provides complex and highly configurable
promising functionality that enables you to configure how the search
will be conducted. Here are the key points of the supply chain availability
search mode:

The search mode is a comprehensive
and highly customizable mode of promising.

Detailed availability search is performed
across supply chain depending on the options that you select when
you create the rule.

Pegging information is generated
by the engine.

Lead times, calendars, capacities,
transport modes, and supply chain network are considered during promising.

When you create ATP rules in supply chain availability
search mode, you specify many additional attributes including these:

Whether to search components and
resources

Whether to enable a profitable-to-promise
search

Whether to respect allocation constraints

Which types of supply and demand
to consider

What lead time to use for the infinite
availability fence

How many days to consider for past-due
demand and past-due supply

ATP Rule Precedence: How It Is Determined

You assign available-to-promise (ATP) rules
to specific items, organizations, or item categories, or to combinations
of specific items and organizations. When order promising is determining
which ATP rule to use for the item being promised, there may be multiple
rules that are applicable, but only one rule will be applied. For
example, there may one ATP rule assigned to the item category of the
item being promised, and another ATP rule assigned specifically to the item that is being promised. When there are multiple
rules applicable to the item being promised, a hierarchical precedence
is used to determine which rule will apply.

Settings That Affect ATP Rule Precedence

When assigning an ATP rule, you select an assignment
basis for the assignment. The four choices for assignment basis are
item category, item, organization, and item and organization combined.

How ATP Rule
Precedence Is Calculated

When there are multiple ATP rules applicable to the
item being promised, order promising uses a hierarchical precedence
of least granular assignment basis to most granular assignment basis
to determine which rule to apply. Order promising applies the rule
with the most granular assignment basis. The following lists the four
choices for assignment basis in order of least granular to most granular:

Item category

Item

Organization

Item and organization

Lead-Time-Based and Infinite-Availability-Based
Promising Modes

When applying an available-to-promise (ATP)
rule in the infinite-availability-based promising mode, order promising
bypasses supply consideration and determines the promise date from
the requested date. Because supply is assumed to be infinite for all
days, a request is always promised on the requested date, except in
cases where transit lead times are violated.

Settings That Affect Infinite-Availability-Based ATP Mode

Which constraints order promising must respect when
determining the promise date is determined by the type of requested
date: requested arrival date or requested ship date.

How Infinite-Availability-Based Promising Results Are Determined

Order promising assumes infinite availability on all
days, so no supply and demand matching is done for infinite promising.
However, order promising must still respect certain constraints for
the organization when determining the promise date from the requested
date.

If the requested date is the requested arrival date,
order promising must still respect calendar constraints and transit
lead time constraints.

If the requested date is the requested ship date,
order promising must still respect calendar constraints.

Lead-Time-Based
Promising Mode: How It Determines Promising Results

In the lead-time-based promising mode, the
promised date is delayed from the requested date based on the lead
time defined in the available-to-promise (ATP) rule being applied
for the item being promised.

Settings That Affect the Lead-Time-Based ATP Mode

The following two settings affect the promising results
for lead-time-based promising:

Lead time to be considered

Type of requested date

The lead time to be considered is defined in the ATP
rule being applied.

The type of requested date is defined in the fulfillment
line being promised. The requested date is one of the following two
types:

Ship Date

Arrival Date

How Lead-Time-Based Promising Results Are Determined

The calculations used to determine the promising results
depend on the type of requested date:

The requested date is the ship date.

Order promising applies the lead time offset defined
in the ATP rule and schedules a promise on the requested date plus
lead time offset after inflating the calendar date to account for
any holidays. Order promising will not check whether there is availability
of the item because even if there is availability of the item, the
availability must be ignored.

The requested date is the arrival
date.

Order promising first derives the requested
ship date by applying a transit time offset to determine the requested
ship date. To determine the offset, the default carrier, shipping
mode, and service level associated between the ship-from date and
the ship-to date is considered. To derive the promised ship date,
order promising then applies the lead time defined in the ATP rule
to the derived requested ship date. Then to calculate the promised
arrival date, order promising applies the transit time for the specified
or default ship method . When determining dates, order promising accounts
for any calendar constraints.

Promising Attributes
for Lead Time Based Promising: Points to Consider

In the lead-time-based promising mode, the
promised date will always be delayed from the requested date based
on the lead time defined in the available-to-promise (ATP) rule being
applied.

Lead Time Considered

When you create an ATP rule in the lead time based
promising mode, you specify which one of the following four lead times
is considered when the rule is applied:

Total lead time

Cumulative manufacturing
lead time

Cumulative total lead time

User-defined lead time

Supply-Chain-Availability-Search-Based Promising
Mode

Supply Chain
Availability Search: How It Determines ATP

The goal of the supply chain availability
search is always to find the available-to-promise (ATP) result that
minimizes the lateness of the fulfillment line. The options considered
by specific supply chain availability search are determined by a number
of settings. The results of the search are affected by which options
are considered and by what factors must be evaluated when the options
are considered.

Settings That Affect Supply Chain Availability Searches

The behavior of the supply availability search is
primarily determined by the following four factors:

Constraints specified on the fulfillment
line, such as the specification of a ship-from warehouse and whether
splits are allowed

Attribute settings for the ATP rule
that is being applied

The supply chain defined by the assignment
set in use and the sourcing rules that it contains

Allocation constraints from an applicable allocation rule

Additional settings determine what additional options
the supply chain availability search can consider. The following must
be true for the supply chain availability search to consider capable-to-make
when determining promising availability:

The item is built from components,
and the ATP rule has been enabled to search for components and resources.

Inventory is maintained at the component
level.

Modeling of bills-of-material and
routings have been collected into the order orchestration
and planning data repository from the applicable fulfillment
systems.

How Supply
Chain Availability Searches Determine Promising Results

If the fulfillment line has many constraints specified,
such as substitutions not allowed, the nature of the alternative options
generated by the supply chain availability search changes. In the
most constrained case, when a ship-from warehouse is specified and
substitution and splits are not allowed, promising options are generated
from only the specified ship-from warehouse for the specified item,
possibly by considering different shipping methods that deliver the
item to the customer site.

The fewer constraints specified on the fulfillment
line, the more possibilities the supply chain availability search
can consider. For example, if a ship-from warehouse is not specified,
and splits and item substitutions are allowed, the supply chain availability
search looks for the best possible ways of promising the fulfillment
line by looking across all warehouses specified in the applicable
sourcing rules and by considering splitting by date, or substituting
items, or both. Order promising determines a default availability
option as well as availability options that represent the best possible
availability from each warehouse.

Unless the constraints on the fulfillment line restrict
it from doing so, the supply chain availability search always considers
the supply for the item at other warehouses, also known as transfer
capable-to-promise, and the supply for the item at suppliers, also
known as buy capable-to-promise. If the ATP rule being applied has
enabled the consideration of components and resources, the supply
chain availability search considers the availability of the components
and resources consumed during manufacturing, also known as make capable-to-promise,
For example, if the settings enable a capable-to-promise search, and
an end item is made of two components, C1 and C2, which are assembled
on a resource R1, if supply is available for the components, but not
for the end time, the fulfillment line is promised by using the available
supply of the components and by considering the resource availability.

If the Profitable to Promise attribute is enabled
for the ATP rule being applied, the supply chain availability search
overrides sourcing priorities to respect the least-cost source that
it can promise from. The costs considered when determining the most
optimal location to source the promise from are the following:

Standard cost at internal organizations

Standard cost at supplier locations

Cost of internal transfers between
organizations

Cost of transit from supplier to
internal organizations

Cost of transit from ship-from locations
to customer sites by shipping method

In the case of make capable-to-promise, the following
costs are also considered:

The cost associated with resource
consumption defined as cost per unit of resource consumed

The cost of the components required
to make the end item

Profitable to Promise Example

An item is being requested on a fulfillment line with
the following quantity and date:

Requested Quantity: 60 units

Requested Date: 05-Feb-2011

Two warehouses, M1 and M2, both have 100 units of
the requested item available, and the customer would receive the item
on 05-Feb-2011 from both warehouses. M1 is the preferred warehouse
per the applicable sourcing rule, but the ATP rule being applied has
the Profitable to Promise attribute enabled. The availability search
considers the cost of the item at each warehouse:

M1 standard cost: $20 per unit

M2 standard cost: $10 per unit

In this example, the ATP search overrides the warehouse
with the higher priority in the sourcing rule. The promising result
is 60 units from warehouse M2 to arrive at the client with no delay.

When creating an available-to-promise (ATP)
rule in supply chain availability search mode, you define promising
attributes to influence how order promising will determine fulfillment
options and fulfillment option priority when applying the ATP rule
to determine order promising results. You define whether order promising
will search components and resources to find promising options that
include making the item. You define whether order promising will include
profitable to promise to determine which fulfillment option to use.
You also define whether the ATP rule will override applicable allocation
rules.

To define the promising attributes, you enable or
disable the following attributes for each ATP rule that you create
in the supply chain availability search mode:

Search components and resources

Enable profitable to promise search

Respect allocation constraints

Search Components and Resources Attribute

Select the Search
components and resources check box to enable order promising
to consider whether the end item can be made using its component and
resources if an item is not available at a requested location. When
order promising is applying an ATP rule with search components and
resources enabled, order promising can determine promising results
by looking into the availability of the components and resources required
to make the item being promised. In make-to-order environments, inventory
is often not available for the ordered item, so it is necessary for
order promising to look at components and resources to promise the
order. Order promising respects all relevant calendars, lead times,
and capacities when searching components and resources.

Enable Profitable to Promise Search Attribute

Select the Enable
profitable to promise search check box to enable order
promising to use the lowest total fulfillment cost option as the final
factor for determining which fulfillment option to choose. Order promising
always gives highest priority to demand satisfaction so that an order
is never delayed for the sake of using a lower cost option. However,
when order promising is applying an ATP rule with the profitable to
promise search attribute enabled, if order promising finds more than
one fulfillment option for the same fulfillment date, order promising
determines the fulfillment cost, and sourcing priority may be overridden
if the source with the lower cost has a lower priority. When determining
cost, order promising considers the standard cost of an item at an
internal organization or order promising considers the supplier costs,
transfer costs, rolled up costs in the case of manufacturing, and
delivery costs to the customer.

Respect Allocation Constraints Attribute

Select the Respect
allocation constraints check box to direct order promising
to apply allocation constraints defined by any allocation rules applicable
to the item being ordered. If you do not select the Respect allocation constraints check box,
order promising will disregard allocation constraints when applying
the ATP rule.

Defining an Infinite Availability Time Fence: Points to Consider

You define the infinite availability time
fence to specify the horizon after which supply is considered to be
infinite. Order promising considers any demand that falls beyond this
time fence as available. When a promise is made at the infinite time
fence, no real supplies are consumed.

Infinite Availability Time Fence

Order promising assumes infinite supply availability
after the time period defined by the infinite availability fence.
For requested dates after the time fence, order promising promises
on the requested date without checking availability. If the requested
date is beyond the infinite time fence, no real supplies are used
for promising. For requested dates within the infinite availability
time fence, order promising conducts a supply chain availability search.

You specify a user-defined number of days for a user-defined
infinite availability time fence, or select from one following three
lead times to define a lead time based infinite availability time
fence:

Total lead time

Cumulative manufacturing
lead time

Cumulative total lead time

Tip

You should define an infinite availability time fence.
If you do not define an infinite availability time fence, order promising
uses a horizon of a year which incurs a large increase in the memory
used by the order promising engine.

You define past-due supply and past-due demand
to limit the past-due supply and past-due demand considered when order
promising determines promising results.

Past-Due Demand Considered

Past-due demand is a demand with a scheduled date
earlier than the current date. Most past-due demands need to be considered
and accounted for as they are expected to ship in the future. However,
you may have a number of days of past-due beyond which you no longer
consider the demand valid. You specify the number of days of past-due
for past-due demand to be included when order promising determines
promising results. Order promising does not consider any past-due
demand due before the number of days you specify. If you do not specify
a value for past-due demand considered, all past-due demand will be
considered.

Past-Due Supply Considered

Past-due supply is a supply, usually in the form of
a purchase order, for which the expected date is earlier than the
current date. Most past-due supplies need to be considered as the
expectation of supply is still considered valid. You specify the number
of days of past-due supply to be included when order promising determines
promising results. Order promising does not consider any past-due
supply expected before the number of days you specify. If you do not
specify a value for past-due supply considered, all past-due supply
will be considered.

Defining an ATP Time Fence: Points to Consider

To ensure that short term supply is preserved
for orders within the short term, define an available-to-promise (ATP)
time fence. By defining an ATP time fence, you prevent scenarios where
longer term orders that come in first are pegged against existing
supply, delaying the promise for orders that come in for the short
term.

Requested Dates within the ATP Time Fence

Supply searches for the period within the ATP time
fence look for existing supply before looking through the supply chain
for item availability. In other words, the supply search looks for
on-hand supply before looking for capable-to-promise supply.

Requested Dates outside the ATP Time Fence

Supply searches for dates outside of the ATP time
fence look for capable-to-promise supply before looking for existing
supply availability.

The ATP Time Fence

You specify a user-defined number of days for the
ATP time fence, or select from one following three lead times to define
a lead time based ATP time fence:

Total lead time

Cumulative manufacturing
lead time

Cumulative total lead time

Manage Planning Allocation Rules

Planning Allocation
Rules: Explained

You use allocation rules to control how supply
is allocated among various classes of demand. If allocation rules
are not defined, order promising promises on a first-come-first-serve
basis. If orders for a lower priority customer come in first, the
lower priority customers could consume scarce supply. If you have
defined an allocation rule for a demand class, the allocation amount
serves as the upper allocation constraint for that demand class for
items the allocation rule has been assigned to.

You specify how supply is allocated using one of the
following three specification types:

Number: Fixed quantity is allocated
to a demand class.

Percentage: Percentage of total supply
is allocated to a demand class.

Ratio: Relative ratios between the
various demand classes are used to divide up the total available supply
within a week.

Controlling Allocation among Demand Classes

You determine how to allocate your supply among various
classes of demand using one of the three specification types. For
each fulfillment line with a demand class specified for which there
is an applicable allocation rule, order promising applies the allocation
rule when assessing the quantity requested against the quantity available.
Orders are promised up to the allocation defined for the demand class.

Fulfillment Line 1: Delayed by 7
days since there is insufficient supply to allocate until additional
supply is received on 26-Oct-2011.

Fulfillment Line 2: No delay since
there is sufficient supply for the requested date.

Planning Allocation
Rule Precedence: How It Is Determined

You assign allocation rules to specific items,
specific organizations, specific item categories, or combinations
of specific items and organizations. When the Order Promising process
is determining whether an allocation rule applies to the item being
promised, the process may determine that multiple rules are applicable.
However, only one rule will be applied. For example, there may one
rule assigned to the item category of the item being promised, and
another rule assigned to the item that is being promised. When there
are multiple rules applicable to the item being promised, a hierarchical
precedence is used to determine which rule will apply.

Settings That Affect Allocation Rule Precedence

When assigning an allocation rule, you select an assignment
basis for the assignment. The four choices for assignment basis are
item category, item, organization, and item and organization combined.

How Allocation
Rule Precedence Is Determined

When there are multiple allocation rules applicable
to the item being promised, order promising uses a hierarchical precedence
of least granular assignment basis to most granular assignment basis
to determine which rule to apply. Order promising applies the rule
with the most granular assignment basis. The following lists the four
choices for assignment basis in order of least granular to most granular:

Item Category

Item

Organization

Item and organization

Allocation
Targets: Examples

Allocation targets can be defined using a
specification type of number, percentage, or ratio. The following
examples illustrate the use of each of these specification types.

Number Example

When you define allocation using the number specification
type, you are specifying a fixed quantity to be allocated to the demand
class. For example, if you want to allocate 500 units for a high priority
demand class, you create an allocation rule using the number specification
type with an allocation target of 500 for the high priority demand
class.

Percentage Example

When you define allocation using the percentage specification
type, you are specifying a percentage of overall item supply to be
allocated to a demand class. For example, if you create an allocation
rule using the percentage specification type with an allocation target
of 20 for the low priority demand class, if total supply is 1000,
up to 200 units may be promised for the low priority demand class.

Ratio Example

When you define allocation using the ratio specification
type, you are specifying that a relative ratio between the demand
classes is used to divide up the total available supply within week.
For example, if you create an allocation rule using the ratio specification
type with a three to one ratio between high priority demands and low
priority demands, and the total supply is 2000 units, the high priority
demand class is allocated 1500 units, and the low priority demand
class is allocated 500 units for the week.